Quotation: "OPEC decision divides market strategists"

Published in MarketWatch:

“The view that Saudi Arabia can increase its profit by unilaterally cutting production is incorrect and outdated,” Omar Al-Ubaydli, program director for International and Geo-Political Studies at the Bahrain Center for Strategic, International and Energy Studies, told MarketWatch.

Other countries inside OPEC cannot be trusted not to cheat on their quotas, he said. Shale oil production is quick to “reactivate” as soon as prices rise, and as more shale oil comes back on line, the need for the U.S. to import oil decreases which would then pressure prices for oil at Saudi Arabia’s expense, he said.

"Defending its market share is the right call in what has almost become a competitive market,” said Al-Ubaydli, who is also an affiliated senior research fellow at the Mercatus Center at George Mason University. Continue